BlackRock develops tokenization technology amid the success of Bitcoin and Ethereum ETF

The world’s largest asset manager is developing its own technology related to digital representations of traditional assets, BlackRock CEO Larry Fink said Tuesday.

If the company — which disclosed a record $13.46 trillion in assets under management — could move to offering ETFs as tokens to investors, it would broaden access to capital markets and reduce costs, he said during the company’s third-quarter earnings call. revenue broadcast.

As BlackRock dives deeper into digital assets, Fink said the company is already “having conversations with all the major platforms” in the financial world about how they can play a role in BlackRock’s tokenization push, within the context of digital wallets.

Since Fink touted tokenization as the future of markets in 2022, he has remained a prominent backer of the technology on Wall Street and has served as a potential harbinger for how the most influential financial institutions might adopt digital assets over time.

“It is our belief that we must act quickly,” Fink said of tokenization. “We need to tokenize all assets, especially those that have multiple levels of intermediaries.”

While BlackRock isn’t focused on digital representations of real estate, Fink highlighted this as an area where tokenization could reduce costs. Because every intermediary involved charges fees, Fink said tokenization could make homeownership more affordable.

Tokenized assets have seen some acceptance among individual investors, but Fink said “young people” are the ones using them heavily. By introducing them to more traditional assets earlier, investors can better prepare for life events like retirement, he said.

BlackRock’s USD Institutional Digital Liquidity Fund, or BUIDL, which debuted last year, is among the largest tokenized assets at $2.8 billion, according to data from RWA.xyz. As of Tuesday, it had 89 holders while being issued by a company called Securitize.

BlackRock led a $47 million strategic funding round in Securitize this year. BlackRock’s Global Head of Strategic Ecosystem Partnerships, Joseph Chalom, called the company’s investment at the time “another step in the evolution of our digital asset strategy.”

BlackRock is behind the largest ETFs for Bitcoin and Ethereum, which it claims have $93 billion and $17 billion in assets under management, respectively. MintGlass facts.

Although BlackRock is racing toward tokenized markets, Fink suggested it may still be a while before the public gets a clearer picture of what the Wall Street titan has in store.

“I really believe that in the coming years we will have some exciting announcements about how we can play a bigger role in this whole idea of ​​the tokenization and digitalization of all assets,” he said. “We spend a lot of time on technology. I’m trying to develop our own technology for this.”